Government saving scheme || Saving scheme in India

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Government saving scheme in india

Investing in savings schemes can also help fund the education and marriage of the individual’s children. Apart from it being a disciplined way of saving money, investing in such schemes can also provide additional income. There are also various small savings schemes, where the contribution is less, but the total contribution that has been accumulated over the long run will be large.

 Saving schemes are mostly provided by banks and other financial companies but sometimes they required a high amount of money and a long time so these plans are not useful for middle-class families and street vendors. Therefore people are think easy to save money on piggy and home tools for emergencies but holding money at home is not the best idea because they are not getting interested in their money. India has a large amount population of middle-class families so it becomes a critical problem for the government because it affects the country's economy. So besides other private saving schemes government started various saving schemes for various working people, nonworking people, girls, and children.

 Investing in Government saving schemes are beneficial for all kind of people because these plans require less amount of money and give big returns. So less investment and big return plan become popular because people trust on government and are confident to invest money.  Some government saving schemes are public provident fund,  Kisan Vikash Patra, sukanya samridhi yojana, Jan Dhan yojana, atal pension yojana, and many more.

Let's discuss everything about government saving plans. their return, time period, disadvantages, and advantages so read this article carefully and analyze which plan is best for you.

Public provident fund

The public provident fund was launched in 1968 by the national saving institute. It is available in the branch of the post office.

 Feature

  • Purpose – Retirement
  • Interest – 7.10% per annum
  • Min investment- INR 500
  • Max investment – INR 15000
  • Tax – nontaxable

Condition

  • Investors cannot open multiple accounts
  • Interest compound annually
  • Payable in the form of a lump sum or up to 12 deposits per year
  • The lock period is 15 years and can be extended by another 5 years.
  • NRI and HUFs are not eligible.
  • Investors can avail of a loan between the third and fifth years.

Employee provident fund

This scheme is launched for the employee who wants to save his/her money to invest minimum parts of their salary.

 Feature

  • Purpose – Encourage saving for retirement
  • Interest – 8.5% per annum
  • Min investment – 12% of the basic salary of an employee
  • Max investment – 15000 salaries or more he/she wants

Condition

  • At the age of 55 EPF account can be withdrawn. Partial withdrawal is allowed when the person is above 54 years and 90% of the amount can be withdrawn.
  • If a person quit the job, EPF can be withdrawn.
  •  Of the unemployed -  75% can be withdrawn
  • Unemployed 60 days – Remain 25% can withdraw

 If the employee has provided 5 years of continuous service then he does not have to pay tax on his withdrawal. EPF falls under the EEE category under section 80c of the income tax act. The investment, interest, and maturity amount are all exempt from tax.

National saving certificate

NSC, i.e. National Savings Certificate, is a fixed-income investment scheme backed by the government of India. The savings bond is suitable for small and medium-income investors to save tax while earning returns. This is a secure and low-risk product.

Feature

  • Purpose – promotes small saving
  • Interest- 6.8% guaranteed (revised early quarter)
  • Min – 100 RS
  • Max – No limit (Tax saving plan up to 150000)
  • Centre- Post – office

Terms and condition

  • Interest compound annually by default the interest earned is reinvested into the scheme.
  • NSC doesn’t allow but there are exceptions. In case of the death of an investor or a court order, it can withdraw.

Senior citizen saving scheme(SCSS)

Senior Citizen’s Saving scheme is a government-sponsored savings scheme for senior citizens, launched in 2004. The scheme’s primary objective is to help senior citizens ensure a regular flow of income.

Feature

  • Purpose – Retirement income
  • Interest- 7.4%(Revised early quarter)
  • Min – 1000
  • Max – 15 lakh
  • Centre- Post – office
  • Age range – 55-60 years

Terms and condition

  • Individuals can open multiple accounts.
  • The amount cannot be higher than the retirement amount
  • Deposit rule – cash below 1 lakh
  • Cheque – Above 1 lakh
  • Period – 5 years+ 3 years(extended)
  • Premature withdrawal allowed with penalty

Monthly income scheme

A monthly Income Scheme (MIS) is an investment scheme that promises the investor guaranteed returns at an interest rate of 6.60% per annum. These returns can be availed as fixed monthly income. Post Office Monthly Income Scheme (POMIS) is an investment scheme of the Indian postal service.

Feature

  • Purpose – Monthly income
  • Interest- 6.6% per annum
  • Centre- post office
  • Min – 100 rs
  • Max – 4,50000
  • Account – multiple
  • Monthly returns in the form of interest payments
  • Risk – Low

Terms and conditions

  • The total amount held in the account cannot exceed 4,50000 in a single account and 9 lakh in a joint account.
  • The amount can be transferred from one to another.
  • The amount can be withdrawn in one year and one- three years 2% penalty, 3-5% years, 1% penalty.
  • If the interest earned every month isn’t claimed by the holders, then the interest shall not earn any additional interest

Kisan vikash patra

Kisan Vikas Patra is a small savings instrument that facilitates people to invest in a long-term savings plan. This scheme was introduced by India Post in 1988. Even though this scheme was popular, a Government Committee formed in 2011 suggested that KVP could be misused for purposes like money laundering. In 2014, Kisan Vikas Patra was relaunched with a number of changes including mandatory PAN card proof for investments over Rs.50,000 and income source proof for investments exceeding Rs.10 lakh.

  • Purpose – small savings
  • Interest – 6.9% per annum
  • Min amount – 1000rs
  • Max amount – No limit
  • Centre – Post office
  • Double return – 10yrs 4 month
  • The plan is for everyone.

Terms and conditions

  • Pan card is mandatory above 50000 beyond 10 lakh income proof required.
  • Age – above 18 yrs
  • Period – 30 month

 Sukanya samridhi yojna

The Sukanya Samriddhi Yojana scheme is aimed at the betterment of girl children in the country. Sukanya Samriddhi scheme has been launched to offer a means of saving to the girl child in every family. Tenure of SSY is 21 years from the date of opening of the account or till the marriage of the girl after she attains the age of 18 years.

Features

  • Purpose - Girl child education and marriage
  • Interest - 7.6% compound
  • Min - Max: - 250-1.5 lakh 
  • Centre - Post office
  • Age - below 10 
  • Target age- 21 yrs 
  • At the age of 18, 50% of money can be withdrawn.

Jan Dhan Yojana 

Pradhan Mantri Jan-Dhan Yojana (PMJDY) is National Mission for Financial Inclusion to ensure access to financial services, namely, basic savings & deposit accounts, remittance, credit, insurance, and pension in an affordable manner. Under the scheme, a basic savings bank deposit (BSBD) account can be opened in any bank branch or Business Correspondent (Bank Mitra) outlet, by persons not having any other account.

Benefits under PMJDY

  • One basic savings bank account is opened for unbanked people.
  • There is no requirement to maintain any minimum balance in PMJDY accounts.
  • Interest is earned on the deposit in PMJDY accounts.
  • Rupay Debit card is provided to the PMJDY account holder.
  • Accident Insurance Cover of Rs.1 lakh (enhanced to Rs. 2 lakh for new
  •  PMJDY accounts opened after 28.8.2018) are available with a RuPay card issued to
  •  the PMJDY account holders.
  • An overdraft (OD) facility up to Rs. 10,000 to eligible account holders is available.
  • PMJDY accounts are eligible for Direct Benefit Transfer (DBT), Pradhan
  •  Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), Atal Pension Yojana (APY), Micro Units Development & Refinance Agency Bank (MUDRA) scheme.


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